States set ambitious target for zero-emission vehicle sales

California and seven other states pledge to continue incentives for zero-emission vehicle purchases

California and seven other states have unveiled a plan to put 3.3 million electric and fuel cell vehicles on the road by 2025 — a goal that seems out of reach, based on current market trends.

The states have set a target that 15% of their new-car sales will be zero-emission vehicles a decade from now. Such vehicles include electricity-only cars and hydrogen-powered fuel cell vehicles. Partial-zero-emission vehicles such as plug-in hybrids, which run both on gasoline and electricity, also can count toward part of the goal. But zero-emission sales make up only a tiny fraction of the 15 million to 16 million vehicles sold annually in the U.S.

The so-called multi-state ZEV action plan, to be released Thursday, was developed as part of a larger agreement to speed the introduction of zero-emission vehicles to fight greenhouse gas pollution.

The plan lays out a number of steps to speed consumer acceptance of the vehicles, such as giving such vehicles access to carpool lanes in multiple states and charging lower tolls on roads and bridges for such cars.

"Today, we're putting a foot on the pedal to get more clean cars on the road," said California Gov. Jerry Brown. "This is real action to reduce greenhouse gas emissions."

The other states that have signed the agreement are Connecticut, Maryland, Massachusetts, New York, Oregon, Rhode Island and Vermont. Together they constitute about a quarter of the nation's new-car sales, according to the California Air Resources Board.

There are about two dozen electric or plug-in hybrid models on the market, but almost no fuel cell cars.

Honda has leased out about two dozen of its Clarity hydrogen vehicles. Hyundai has just begun to sell its Tucson fuel cell crossover, and the first delivery is scheduled for next month. Honda plans to introduce a new-generation fuel cell vehicle to the market next year, and Toyota will also start selling a fuel cell vehicle in 2015.

Today, we're putting a foot on the pedal to get more clean cars on the road. This is real action to reduce greenhouse gas emissions.— California Gov. Jerry Brown

Meanwhile, electric car sales have fallen short of expectations, said Adam Jonas, an analyst with Morgan Stanley Research.

"Just a few years ago, forecasts for global EV penetration were as high as 5% or 10% by 2020," Jonas wrote in a report to investors Wednesday. "From today's perspective, we think penetration in the 1% range would be respectable."

One reason is that automakers lose money selling the cars. Jonas said Fiat Chrysler Automobiles takes a $14,000 hit on every sale of the electric version of its Fiat 500.

Most automakers have scaled back their electric car sales targets because of tepid consumer acceptance, he said. Consumers have balked because most of the electricity-only cars can travel just about 80 miles before running out of juice and can take hours to recharge.

Tesla, with its electric Model S sport sedan, is the exception. It has a longer range and offers a level of driving excitement that has captured a small but passionate market segment, he said. But at prices that can top $100,000, the car does not serve a mainstream audience.

Jonas said the states in the ZEV agreement "won't come close" to meeting their target of having zero-emission vehicles constitute 15% of sales in just 11 years.

But the action plan developed by environmental officials from the eight states said that sales of zero-emission vehicles are starting to gain traction.

The plan noted that as of April there were nearly 200,000 of the vehicles operating nationwide. Sales have doubled over the last year alone, with more than half of those sales occurring in the states that have signed on to the ZEV agreement, the states said.

To speed sales, the states agreed to several joint actions. Hoping to lead by example, the state governments plan to make zero-emission cars account for 25% of state fleet purchases.

They also pledged to continue rebates for consumers, such as California's $2,500 incentive to purchase an electric or fuel cell vehicle. But they want to make the rebates instant at the time of purchase. The current system requires the buyer to put up the money and then file paperwork with a state agency to claim the incentive.

Officials plan to make other incentives standard across all eight states in the agreement, such as permits that allow solo drivers to use the vehicles in carpool lanes. The states also will lobby the federal government to maintain its $7,500 income tax credit for the purchase of a zero-emission vehicle.